Friday’s bond market has opened in positive territory, extending a strong
late afternoon rally from Thursday. The stock markets are flat with the Dow
and Nasdaq both down only a couple points. The bond market is currently up
11/32, which should improve this morning’s mortgage rates by approximately
.500 of a discount point if comparing to yesterday’s morning pricing. If
your lender revised lower late yesterday, you may see less of an
improvement in this morning’s rates.
Yesterday’s late rally in bonds was a result of rumors swirling and a Wall
Street Journal story that the Fed will ease market concerns regarding if
and when they will begin to taper their current bond buying program (QE3).
This is expected to come during next week’s FOMC meeting and Chairman
Bernanke’s press conference that will follow. This was big news in the bond
market because the recent spike in bond yields and mortgage rates were
mostly due to worries the Fed was preparing to wind down that program. The
topic is relevant to mortgage rates because under the QE3 program, the Fed
is buying mortgage-related bonds. If that buying disappears, it is believed
that bond prices will fall, pushing mortgage rates higher.
There were three economic reports posted this morning that were relevant to
the mortgage markets. The first was May's Producer Price Index (PPI) from
the Labor Department at 8:30 AM ET. They announced that the overall PPI
reading rose 0.5% and the core data was up 0.1%. The overall reading
exceeded forecasts of a 0.1% rise, meaning that inflationary pressures at
the manufacturing sector of the economy were a little stronger than
expected. That is bad news for bonds, but the more important core reading
that excludes more volatile food and energy prices matched expectations.
Therefore, we should consider the data neutral-to-slightly negative for
mortgage rates.
The second report of the morning was May's Industrial Production data at
9:15 AM ET that revealed output at U.S. factories, mines and utilities was
unchanged from April’s level. Analysts were expecting to see a 0.1%
increase in this report. It was a minor variance in a moderately important
piece of data so its impact on today’s trading has been minimal.
June's preliminary reading to the University of Michigan's Index of
Consumer Sentiment came at 9:55 AM ET. It showed a reading of 82.7 that
fell slightly below analysts’ forecasts of 83.0 and was a decline from
May’s 84.5. That is good news for the bond market and mortgage pricing
because it means surveyed consumers were less optimistic about their own
financial and employment situations than many had thought. We consider that
to be favorable news for the bond and mortgage markets because waning
confidence usually means consumers are less likely to make a large purchase
in the near future, helping to limit economic growth.
Next week isn’t overly busy with a high number of relevant economic reports
and other events that we need to be concerned with. However, most of what
is scheduled is considered to be highly important. What we will get
includes a key measurement of inflation at the consumer level of the
economy and an FOMC meeting that will be followed by updated economic
forecasts from the Fed and another press conference with Chairman Bernanke.
None of these are set for Monday, so we can expect weekend news to drive
the markets early Monday morning. No doubt it will be an active week in the
financial and mortgage markets though, particularly the middle part of the
week. Look for details on next week’s calendar in Sunday’s weekly preview.
If I were considering financing/refinancing a home, I would.... Lock if my
closing was taking place within 7 days... Float if my closing was taking
place between 8 and 20 days... Float if my closing was taking place between
21 and 60 days... Float if my closing was taking place over 60 days from
now...
|
To sum up, loans for people with bad credit scoring are easy and affordable loan schemes which give you comforts along with cash. Getting such timely monetary aids is the best way to meet all your sudden expenses without any hassle, Please visit
ReplyDeletesame day payday loans for people with bad credit
unsecured loans for pensioners
instant loans for bad credit.